San Francisco – May 13, 2013 – Virgin America today reports its financial results for the fourth quarter of 2012, full-year 2012, and the first quarter of 2013. The airline reported its first-ever fourth quarter operating profit in the quarter ending in December 2012, with a 4.4 point improvement in operating margin over the fourth quarter of 2011. In addition, Virgin America improved financial results in the first quarter of 2013, significantly narrowing its operating loss from the same period the year prior. For the first quarter of 2013, Virgin America reported a 69 percent year-over-year improvement in operating results compared with the first quarter of 2012, driven by an 18 percent growth in RASM.

Highlights of the two quarters are as follows:

Fourth Quarter 2012 Financial Highlights

Virgin America achieved its first-ever fourth quarter operating profit with $5.1 million of operating income, an improvement of $13.2 million, compared with the fourth quarter of 2011.

Fourth quarter revenue per available seat mile (RASM) increased by 9 percent, the highest in the domestic industry.

Available seat miles (ASMs) increased by 16 percent, primarily the result of increases to the fleet size early in 2012.

The airline recorded operating revenues of $350.4 million in the fourth quarter, a year-over-year increase of 27 percent.

Its average fare increased 14 percent year-over-year, indicative of growing awareness and guest loyalty that Virgin America has built in its markets through its industry-leading product and service.

Cost per available seat mile (CASM) excluding fuel increased by 6 percent compared to the year earlier quarter, largely a result of the airline’s change in strategy to reduce aircraft utilization and eliminate seasonally weaker frequencies.

The average fuel cost per gallon during the quarter was $3.00, a decline of 6 percent year-over-year.

EBITDAR increased to $65.1 million in the fourth quarter, a year-over-year improvement of 54 percent.

The airline held $76 million in unrestricted cash as of December 31, 2012.

The Company significantly outpaced the entire U.S. airline industry with year-over-year RASM growth of 18 percent.

ASMs decreased by 4 percent year-over-year, as the airline focused on improving its schedule for business travelers and eliminating seasonally weak frequencies during the winter.

Its average fare increased by 19 percent over the year earlier quarter, continuing the trend demonstrated in the fourth quarter of 2012 of increased demand by guests for Virgin America’s product.

Operating revenues were $301.3 million, an increase of 13 percent from the first quarter of 2012.

CASM excluding fuel increased by 8 percent year-over-year, primarily due to reduced utilization of the fleet.

EBITDAR increased seven fold to $44.7 million from $6.5 million in the same period a year-ago.

Unrestricted cash was $58 million as of March 31, 2013.

“We’re pleased with our first-ever fourth quarter operating profit and the progress we have seen in the first quarter - traditionally the most challenging period for our industry,” said David Cush, Virgin America’s President and CEO. “Our improved financial performance reflects the changes we made last year to optimize our winter network schedule as we slow our growth. And it also reflects the growing guest awareness and loyalty we’ve seen as our network has grown. We’ve always said that once people fly us, they stick with us - and show a preference for our service. Our industry-leading RASM growth for the past six months is a testament to that and to the work of a team that has truly delivered on the promise of creating the best guest experience in the skies.”

The airline’s full--year 2012 operating loss was $31.7 million. The Company’s operating margin for 2012 improved by 0.2 points, to (2.4) percent, compared with 2011. Year-over-year, revenue grew by 29 percent in 2012, to $1.3 billion, on a 27 percent increase in capacity. Virgin America added six Airbus A320 family aircraft to its fleet during 2012, ending the year with an operating fleet of 52 aircraft. The airline ended 2012 with $76 million in unrestricted cash.

Virgin America completed a major two-year growth phase during 2012, having taken delivery of 25 aircraft between the second quarter of 2010 and the second quarter of 2012, almost doubling the size of the fleet. With this major growth phase largely behind the Company, Virgin America is now experiencing improved revenue performance across its network. Virgin America took delivery of one aircraft in the first quarter of 2013, increasing its total operating fleet to 53 aircraft. The Company does not expect to increase its fleet size again until 2015, when aircraft on order from Airbus are scheduled for delivery. The Company expects continued improved year-over-year financial performance throughout the remainder of 2013 as a result of the slower growth strategy.

In addition to slowing growth by deferring new aircraft deliveries, Virgin America made targeted changes to its network schedule in the first quarter to optimize seasonal flying and better match supply with winter demand. These changes resulted in a 17 percent reduction in the average daily utilization of the fleet to 10.3 hours per aircraft per day. While the reduced schedule was a major driver behind the 18 percent improvement in RASM, it also contributed to an 8 percent increase in CASM excluding fuel costs. The airline ended the quarter with $58 million in unrestricted cash.

Balance Sheet Improvements

The airline also announces today that it has recently reached agreements with investors to modify the interest rate on a large portion of existing debt and to eliminate certain indebtedness to restructure its balance sheet. The restructuring eliminated $290 million of debt as of December 31, 2012, and approximately $20 million of accrued interest recorded in the first quarter of 2013. If this restructuring had been in place on January 1, 2013, Virgin America’s first quarter net loss would have been reduced by approximately $20 million. These changes with investors are a first step toward preparing the Company for access to the public markets at a future date.

In addition, the Company closed an additional $75 million debt financing that was fully funded at the closing. This additional liquidity will further strengthen Virgin America’s improving financial position.

As a result of these balance sheet and liquidity initiatives, the Company expects its interest expense for the second half of 2013 to be approximately $20 million, or roughly one third of the interest expense recorded in the second half of 2012.

“With the strong improvement in first quarter 2013 financial performance, we are on track for a significant operating profit for the full year,” said David Cush. “The agreements reached with our investors enhance the improvements we are seeing in our business, and are a first step in modifying the Company’s capital structure to one more in line with public companies. With this solid improvement to our capital structure, we now expect to achieve a net profit in the second half of 2013, and are well positioned for sustained healthy financial performance in 2014 and beyond.“

Virgin America continued to drive significant growth in 2012: expanding its fleet from 46 aircraft in January 2012 to 52 aircraft in December 2012 (in March 2013, the carrier took delivery of its 53rd aircraft, which came into service in April); achieving major carrier status as defined by the U.S. Department of Transportation (DOT); launching service to Philadelphia, Portland, Ore., and Washington D.C.’s Reagan National Airport; and in December announcing plans to inaugurate Newark service from both San Francisco and Los Angeles in 2013. Since its 2007 launch, the airline has created 2,600 new jobs, expanded to more than 20 cities, signed up 2.6 million Elevate® frequent flyer program members and swept the reader-based travel awards including “Best Domestic Airline” in Condé Nast Traveler’s Readers’ Choice Awards and Travel + Leisure’s World’s Best Awards. As one of the few growing U.S. airlines, Virgin America grew by 283 teammates in 2012.

Operational Highlights

In 2012 the Virgin America achieved an 83.5 percent cumulative A-14 on-time ranking, compared to the industry average of 81.9 percent.

The airline’s baggage handling rate for 2012 was 0.87 mishandled baggage reports per 1,000 guests, placing it first among all U.S. carriers reporting to the DOT for baggage reliability.

Virgin America was named the best airline in 2012 in the Airline Quality Rating, a joint research project conducted annually by faculty at Wichita State University and Purdue University that looks at airlines’ on-time performance and baggage handling, involuntary denied boarding and the customer complaint rates as reported by the DOT.

Virgin America currently flies to San Francisco, Los Angeles, New York, Newark (began April 21, 2013), Washington D.C. (IAD and DCA), Las Vegas, San Diego, Seattle, Boston, Fort Lauderdale, Orlando, Dallas-Fort Worth, Los Cabos, Cancun, Chicago, Puerto Vallarta, Palm Springs (seasonal), Philadelphia, and Portland. This month, the carrier launched service between LAX and Norman Y. Mineta San Jose International Airport (SJC). Later this month, the airline will inaugurate new daily service between San Francisco and Austin-Bergstrom International Airport (AUS). The airline will begin summer seasonal service to Ted Stevens Anchorage International Airport (ANC) in June.

Although a privately held company, Virgin America is announcing these financial results in advance of the DOT quarterly reports.

EDITORS NOTE: Virgin America is a U.S.-controlled and operated airline and is an entirely separate company from Virgin Atlantic. Sir Richard Branson’s Virgin Group is a minority share investor in Virgin America.

About Virgin America: Headquartered in California, Virgin America offers guests attractive fares and a host of innovative features aimed at reinventing air travel. Virgin America was named “Best Domestic Airline” in the Condé Nast Traveler 2008, 2009, 2010, 2011 and 2012 ‘Readers’ Choice’ Awards and “Best Domestic Airline” in Travel + Leisure’s 2008, 2009, 2010, 2011 and 2012 ‘World’s Best’ Awards. The airline’s base of operations is San Francisco International Airport (SFO)’s sleek and sustainable new Terminal 2. The airline’s new aircraft offer interactive in-flight entertainment systems and power outlets near every seat. Virgin America offers Gogo™ WiFi on every flight and hosts the largest in-flight entertainment library in the North American skies via the touch-screen Red™ platform. For more: www.virginamerica.com